Super Review (June 2012)

AUSTRALIA’S LEADING SUPERANNUATION MAGAZINE

WWW.SUPERREVIEW.COM.AU

VOLUME 26 - ISSUE 5

JUNE 2012

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CUSTODIANS

HEAD TO HEADConsolidation is increasing

competition among big custodians

for key mandates

Stronger Super jigsawstill a puzzle

HERON RATINGSThe best-rated Eligible

Rollover Funds

DROPPING THE BALLRegulators need coaching

after Trio Capital debacle

Feature

2 SuperReview MAY 2012 www.superreview.com.au

Ausfund top ERF six years straight

BY MIKE TAYLOR

www.superreview.com.au JUNE 2012 SuperReview 3

continued on page 4 >

Eligible Rollover Funds

Australia’s Unclaimed

Super Fund (AUSfund)

Eligible Rollover FundsSuperTrace

Australian ERF

AMP ERF

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

Financial Year Ending

June 2001

June 2002

June 2003

June 2004

June 2005

June 2006

June 2007

June 2008

June 2009

June 2010

June 2011

0

Number of ERFMembers

Table 1: Number of ERF Members

SR

> continued from page 3

4 SuperReview JUNE 2012 www.superreview.com.au

6

5

4

3

2

1

June 2001

June 2002

June 2003

June 2004

June 2005

June 2006

June 2007

June 2008

June 2009

June 2010

June 2011

0

Financial Year Ending

Billi

ons

of $

Total ERF Assets

Table 2: Total ERF Assets

ASFA questions Stronger Super costsBY MIKE TAYLOR

The SuperStream initiatives contained in the

Government’s Stronger Super legislation could

cost in the order of $10 per year per superan-

nuation account, according to the Association of

Superannuation Funds of Australia (ASFA).

In a submission to the Parliamentary Joint

Committee reviewing the Stronger Super legisla-

tion, ASFA has expressed concern at the size of

a levy to be imposed on superannuation funds to

fi nance the Australian Taxation Offi ce’s (ATO’s)

implementation of the Stronger Super changes

and the manner in which the money will be spent.

“The levy for APRA (Australian Prudential Regu-

lation Authority)-regulated superannuation funds

in 2011-12 totalled $46.8 million.

“If the Bill is passed the total levy likely to be

proposed for 2012-13 (including the new money

for the ATO) could be four times that,” the submis-

sion said.

The ASFA submission said superannuation

funds “are deeply concerned about how such an

increased levy will impact on members’ accounts”.

“The feedback ASFA has received is that the

impact will be more like $10 a year per affected

account, rather than the $4 an account mentioned

in the Explanatory Memorandum,” it said. “The

reason for this is that there are some millions of

accounts in Eligible Rollover Funds, exempt public

sector accounts, self-managed superannuation

funds and accounts subject to the member benefi t

protection due to low balance.”

The ASFA submission also raised the question

of whether ATO expenditures of the order proposed

were justifi ed on cost benefi t grounds.

“Any additional costs to funds need to be consid-

ered in the context of possible future effi ciency

savings,” the submission said. “The latest fund

expense fi gures provided to ASFA by Rice Warner

indicate that in 2010-11 the total cost to APRA-

regulated funds for processing contributions was

$230 million, with a further $145 million for benefi t

processing.

“A 50 per cent reduction in both (which could be

on the optimistic side) gives a $190 million or so a

year fi gure for cost savings to funds,” it said.

“The median cost per active member of contri-

bution processing for active members (about a third

of total member accounts) was $16. The APRA levy

in regard to SuperStream ATO expenses proposed

in 2012-13 would be around $12 per active account.

Over all accounts, the fi gures are contribution

processing costs of around $5 an account and an

APRA levy of $4 for ATO costs.

“The cost benefi t ratio of the ATO expenditure

and required fund expenditure on the face of it

would be unlikely to pass any usual private or

public sector benchmarks,” the ASFA submis-

sion said.


Members’ interest trumps mergerBY BELA MOORE

The best interest of

members is still driving

Asset Super (Asset)

decision-making and

not a need to align

with CareSuper (Care)

in the lead-up to their

merger, said Asset chief

executive John Paul.

The merger date has

been set for 26 October

2012, but Paul said while

the super fund wasn’t

entering into any long-

term contracts, any necessary decision-making would be driven

by a concern for the individual fund and its members.

“But we won’t merge until we meet the successor fund deed

requirement which is that we have to have a legal sign-off to

say that members of Asset in the main are either equal in the

benefi t that they will get going into the merger or that they will

have better benefi ts,” he said.

However, Paul said he was supportive of the alliance which

would bring benefi ts of economies of scale, internal resourcing,

and more choice for members. Both funds are currently

working on unifying fund services and transitioning.

Earlier in the year, CommInsure won an internal tender

process to appoint a single insurance provider, edging out

Asset’s current insurer MLC. Paul said the new insurance

arrangement could deliver more fl exibility and comprehensive

cover options for Asset members.

Both funds employ National Asset Servicing for custodian

services and Australian Administration Services (AAS) for

administration, although Paul said AAS still had to transfer

members into the same bucket on the AAS platform, as Care’s

administration is carried out from Melbourne and Asset’s from

Sydney.

Paul said Asset also had to notify its advice provider – Money

Solutions – of its intention to switch to Care’s provider, IFFP,

after the trustees have signed off on the merger.

He said they wouldn’t have everything done by 26 October,

particularly Asset’s tax returns which will be fi nalised later in the

year, but they are working now to “cross the t’s and dot the i’s”.

Nevertheless, he said if asset consultant Mercer advised

them of an underperforming fund manager, they would

not automatically choose a Care-aligned manager as a

replacement.

“Obviously with a merger you try as best you can to

harmonise things. That’s not always possible, and certainly

we’re running the fund as we should be – as a stand-alone

Asset fund at the present time, but we’re keeping an eye on

things,” he said.

Industry funds collect more in MarchIndustry funds collected more contributions than public sector funds this quarter, although both took the lion’s share over corporate funds, according to the Australian Prudential Regulation Author-ity’s Quarterly Superannua-tion Performance to the end of March 2012.

Industry funds received 32.6 per cent of total funds during the March quarter, accounting for $6.6 billion. Public sector funds took 32.1 per cent, or

$6.5 billion, while corporate funds collected $872 million amounting to 4.3 per cent.

The total estimated assets of industry funds increased by 7.3 per cent or $17.9 billion to $264.5 billion, public sector assets by 6.3 per cent and retail funds’ assets by 5.2 per cent.

Employers contributed $16.9 billion and members $3.1 billion towards the total contributions to funds with at least $50 million in assets over the March quarter. Spouse,

government and other contri-butions totalled $137 million.

March brought more out-ward rollovers than inward rollovers, with negative net rollovers for industry funds sit-ting at $17 million, $342 mil-lion for corporate funds, $698 million for public sector and $839 million for retail funds.

The combined rate of re-turn for the quarter was 5.4 per cent, with funds’ returns varying by a maximum of 0.2 per cent.

John Paul

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SuperStream levy must be transparent: FSC

The diversity illusion: Perpetual

BY TIM STEWART

The expenditure of the $467 million SuperStream

levy announced in the Federal Budget must be open

and transparent, according to the Financial Services

Council (FSC).

The $467 million levy will take place over seven

years, with $121.5 million due to be levied in the

2012-13 fi nancial year.

In a submission to the Parliamentary Joint

Committee, the FSC confi rmed its support for the

two key measures in the SuperStream reforms:

the consolidation of multiple superannuation

accounts; and the standardisation of processes and

transactions.

While the FSC accepted the need for the levy, it

argued that the Australian Taxation Offi ce, as the

principal expender of monies, should be required to

table a detailed breakdown of the costs for the two

policy measures.

“There is not yet any discourse of how monies will

be allocated between expenditure versus ongoing

costs,” said the submission.

There should be regular reporting to the

SuperStream Advisory Council on expenditure, and

the levy should be applied in a manner consistent

with APRA’s existing rules on levying superannuation

funds, the FSC said.

In addition to the levy, the FSC said its members

would incur capital costs of around $250 million

related to the implementation of SuperStream.

“We believe this to be a conservative fi gure. It does

not include costs related to member communications

and product administration, and is based on a

survey of effi cient superannuation entities with high

technology costs,” the submission said.

BY BELA MOORE

A focus on achieving better super fund member outcomes requires trus-

tees to abandon the “illusion of diversity”, according to Perpetual head of

diversities Michael Blayney and senior portfolio adviser Sandi Orleow.

Orleow said that while funds believe they are diversifi ed, often with the

knowledge that up to 50 portfolio managers are working to achieve diver-

sifi cation, traditional balanced funds are diversifi ed across asset classes

with one allocation decision which skews the level of real diversity.

She said the superannuation

industry was full of agents whose

purpose and function was to

achieve good member outcomes,

and that increased market vola-

tility meant traditional portfolio

construction did not answer

questions of mitigating risk while

achieving good returns.

Blayney said the problem with

old-style balanced funds is that

they all broadly follow the 70/30

investment strategy with 70 per cent invested in equities.

“They kind of all looked similar so that blending four of them you got

back to the same thing as where you started because they all look so

similar,” he said.

He said surveys and peer group risk drive super funds to herd together and

follow the pack, whether it be with balanced funds or default super options.

Blayney said the strength in new approaches was that they were mark-

edly different to the norm. Orleow said the beauty was the fact no one was

constructing new balanced fund portfolios the same, lending them to diversity.

Blayney said the trustee now had more onus to ensure good outcomes

for members, because members of traditional retail funds often received

advice about their decision, while many super members just defaulted into

the easiest option.

They agreed that as more Australians moved into the 55-plus age

bracket, the industry needed to think about alternative approaches that

focus on achieving an objective of Consumer Price Index-plus, and to

marry the funds’ objectives with those of the members.

Omega and LGS invest in global bond fundSenior Omega investment execu-tives Mathew McCrum and Andrew Gruskin will lead the investment team for a new fund seeded by Local Government Super with $170 million.

The Sustainable Global Bond Fund was co-developed by Omega Glo-bal Investments and LGS over nine months and is an Australian first among a handful of global competi-tors, according to McCrum.

He said the fund targets countries with sound governance and environ-mental standards and integrates with Omega’s risk-controlled approach to fixed income investing.

“Our aim is to choose global gov-ernment bonds derived from finan-cially robust and politically stable nations, but which also pass mean-ingful ESG filters,” he said.

LGS chief investment officer Craig Turnbull said the partnership would lead to innovative approaches that allow LGS to continue to invest responsibly. He said investment and operational risk minimisation had become an important part of effective asset allocation.

“We are looking to develop in-novative strategies that manage or mitigate our ESG exposure, and to capitalise on investment oppor-tunities across all asset classes to achieve solid returns for our mem-bers,” he said.

Turnbull said the fund was an example of the super fund’s princi-ples in action. LGS have $3.3 billion invested in responsible investment strategies across a number of asset classes. The $6 billion super fund is a signatory to the United Nations Principles of Responsible Investment and a host of environmental industry groups.

McCrum said the fund builds upon Omega’s existing health rating filters. Based on Omega’s track record, he was optimistic they would produce a high quality, diversified bond port-folio that delivered an above bench-mark sustainability dividend.

Mathew McCrum


ASFA digs in on AUSTRAC funding

Understanding critical to attorney powers

BY MIKE TAYLOR

The Association of Superannuation

Funds of Australia (ASFA) is

continuing its strong opposition to

the need for superannuation funds to

finance the activities of the Australian

Transaction Reports and Analysis

Centre (AUSTRAC).

ASFA’s continuing objections have

been made clear in its response to

a cost-recovery impact statement

issued by AUSTRAC.

In that response, ASFA has also

urged clarity that the earnings

measures utilised with respect to

calculating cost recovery are “the

trustee’s earnings, not the earnings of

the trust”.

“We recommend that this position

be made clear in the Ministerial

Determination for the 2012-13

regulatory period or by way of

a separate formal statement by

AUSTRAC,” the ASFA response said.

However, it used its response to

repeat what it described as “our strong

opposition to the Government’s policy

to recover AUSTRAC’s regulatory costs

from reporting entities”.

“We do not intend to restate the

reasons behind ASFA’s position

again in this submission,” the ASFA

document said. “However, we feel

it is appropriate to again draw your

attention to these prior submissions

which contain, in detail, the reasons

behind our objections to the AUSTRAC

levy, and to advise that ASFA will be

taking up the matter of the AUSTRAC

levy as well as other industry levies

directly with government.”

BY BENJAMIN LEVY

Advisers must consider that when they appoint an

attorney as a super fund trustee, the proscriptions

restricting the attorney’s power won’t apply when he

steps into his role as a trustee, according to Hill Legal

principal Chris Hill.

This can be a critical factor when clients don’t entirely

trust their attorney or are very proscriptive with the

powers of attorney, he said.

Once appointed, the attorney performs his duties as the

trustee, not as the member’s attorney. Any restriction on

an attorney doesn’t apply to the trustee role, Hill said.

Clients might limit the powers their attorney has

to business affairs, assets, or transactions, but if the

attorney has trustee power one cannot control his discre-

tion, Hill said.

It was an important rule of common law, he added.

Hill emphasised that it was important to follow the

mechanical processes when making a trustee appointment.

For example, corporate trustees must be appointed as

directors, he said.

The trustee appointment, or removal, must comply

strictly with the process of the super fund deed, Hill said.

“It’s very important that you drill down into the deed

to look at the mechanical provisions for how a person

becomes a trustee, and, if there is a power of attorney or

legal representative, how they would step into the shoes of

a trustee,” he said.

Minutes of the meeting and consensus may have to be

fi led, and relevant declarations made, Hill added.

UBS, FNZ commit to long-term alliance BY BELA MOORE

UBS and FNZ have announced a strategic alliance designed to expand their ‘direct-to-member investment solution’ and appeal to super funds’ intent on stemming the flow of funds under management (FUM) to self-managed super funds (SMSF).

Australian Super signed on in November last year, and according to head of UBS Platform Solutions Group Scott Webster, the success of the project has led to the an-nouncement of an alliance between FNZ and UBS to further develop the program.

UBS has invested in the development of the FNZ platform for approximately two years, creating a SMSF-like product that gives members direct control over individual investments and real-time trading of any of the top 300 stocks on the ASX.

FNZ is the platform and the registry be-hind the platform, while UBS is effectively the executing broker.

“One of the key motivations for a superan-nuation fund to wish to deploy to their mem-bers the type of direct-to-member invest-ment solution that UBS and FNZ is able to offer, is to stem the number of members that are leaving the large superannuation funds to set up their own self-managed super funds,” said Webster.

He said the platform allows SMSF-like functionality at a fraction of the cost for members, reducing what could be approxi-mately $3,000 in fees and compliance costs to $200 per member.

Webster said he estimates Australian eq-uities, term deposits and cash make up 65 per cent of SMSF assets, which are covered under the arrangement with Australian Super.

He said there was a range of opportunities for future client-driven development, includ-ing expanding product choice and function-ality to include transition to pension, adviser access, exchange-traded funds and unlisted assets.

“We’re going to continue to invest and co-invest with FNZ to improve the functionality and the flexibility of what we’re able to offer to superannuation funds,” said Webster.


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Deloitte points to value of social mediaBY BENJAMIN LEVY

Super funds can save hundreds of thousands

of dollars in administration if they push to

engage members through social media,

according to Deloitte partner and senior

leader in online practice Katherine Milesi.

Speaking at a Deloitte breakfast in

Melbourne, Milesi said super funds thinking

about engaging customers through online

means could save vast amounts of money,

as well as boost productivity and encourage

more innovation.

In a case study of a super fund using

social media, Milesi said the super fund

was shaving nearly $500,000 off the costs

of updating client information by using a

client self-service platform.

Half of those savings just came from

giving the client the ability to change their

details online, she said.

Only 10 per cent of their clients were on

that portal, she said.

Cost savings would become substantial as

clients migrate to online portals, she said.

Super funds could also provide online

information to associated advisers without

the need for reams of paper production –

boosting productivity, Milesi said.

Super funds should also consider

crowd-sourcing to encourage innovation

and refi ne ideas, she said.

“It’s not just in our own organisations

that we need to have these ideas and test

them and adjust them, we can actually

bring people in,” she said.

Super funds should prioritise the

needs of their members if they can’t serve

everyone’s all the time, she added.

AMIST stick with Asset Servicing BY BELA MOORE

AMIST Super will continue to look to NAB Asset Servicing for custodial services after the provider was reap-pointed following an independent review.

NAB has provided custodial serv-ices to the $1 billion industry fund since 2003, and will begin a new three-year contract on 1 June 2012.

Michael Block conducted an independent review of AMIST’s cus-todial arrangements to determine the reappointment of NAB after a thorough review of their current partnership and alternative options.

“NAB’s understanding of our industry, the strength of NAB’s balance sheet and the consistent service levels they have provided over a period were key aspects of our decision,” AMIST Super chief

executive, James Thomas said.General manager of sales, client

relationships and FMS at NAB Brian Keogh said, “Our strong relationship, highlighted by our understanding of the Fund’s re-quirements were deemed important ingredients.”

Keogh said NAB Asset Servicing provided AMIST with a “one-stop-shop”, citing unit pricing services and a competitive fee offering as factors in the reappointment.

The reappointment follows a stack of new clients for NAB Asset Servicing, which totalled nine new clients in nine months.

It was also successfully reap-pointed to provide custodial services to MTAA Super fund in February, al-though it lost the QSuper mandate in March 2012.

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A matter for grave APRA-hension

Australia has good reason to be proud of

the manner in which its “twin peaks”

regulatory system stood the test of the

global fi nancial crisis, but it is now clear

that the collapse of Trio Capital has

pointed to some worrying defi ciencies in that system

where superannuation regulation is concerned.

Because, in fact, where superannuation is concerned,

Australia has a “triple peaks” regulatory system involving

the Australian Prudential Regulation Authority (APRA),

the Australian Securities and Investments Commission

(ASIC) and the Australian Taxation Offi ce (ATO).

It is well known that APRA carries most responsi-

bility for the Superannuation Industry Supervision Act

(SIS Act), while ASIC looks after a range of downstream

advice and governance issues, and the ATO is respon-

sible for administering self-managed superannuation

funds (SMSFs).

For the most part the system works well, but it

clearly failed where Trio Capital was concerned, and

both our politicians and our regulators need to accept

the reality of that failure and address the root causes.

It is simply not good enough for APRA deputy

chairman Ross Jones to seek to distance his organisa-

tion from its failings by suggesting that APRA was

responsible for regulating Trio but not responsible for

the hedge funds Trio ultimately invested in.

As the Parliamentary Joint Committee which

reviewed the Trio collapse revealed, the perform-

ance of both APRA and ASIC left a great deal to be

desired in circumstances where, ultimately, it was an

industry whistle-blower who acted as the trigger for

regulatory action.

It was subsequently revealed during last month’s

Senate Estimates Committee processes that the ATO

knew only too well about one of the central fi gures

in the Trio collapse, US lawyer Jack Flader, but had

not passed that intelligence through to either ASIC or

APRA in the context of the Trio/Astarra investments.

The failure of the ATO to pass through this infor-

mation came despite Treasury telling the Senate

Estimates Committee that well-established protocols

existed for the sharing of information and intelligence

between the three regulatory agencies.

Some time ago, the former ASIC chairman Tony

D’Aloisio likened the role of the fi nancial services

regulator to that of a policeman arriving at the scene of

a car crash and cleaning up the wreckage.

On the face of it, APRA appears to have adopted a

similar approach with respect to how it handled Trio

Capital and, indeed, some of the shortcomings which

led to the losses incurred by MTAA Super.

Simply put, APRA was observing some irregular

behaviour within Trio but was still asking for explana-

tions well after most of the money had disappeared

into offshore investments, never to be seen again.

Such an approach may tick all the boxes in terms

of regulating the activities of the well-disciplined and

reputable organisations which represent the vast bulk

of the Australian superannuation industry, but it clearly

proved ineffective when seeking to identify and act

against what amounted to blatant fraud.

Few of the investors who were burned by the Trio

collapse and received no compensation understand

or respect the explanation provided by Jones, and the

Government should consider this fact when reviewing

the tenure of those running APRA.

Will APRA act any differently under the increased

powers provided to it by the Government’s Future of

Financial Advice and Stronger Super changes? Only

if those at the highest echelons of the organisation

choose to utilise those powers.

Indeed, it is entirely arguable that both ASIC and

APRA had the ability to interpret their governing legis-

lation and consequent regulations in a manner which

would have seen them acting more proactively than

was the case with Trio or, indeed, Storm Financial.

They simply chose a different and much less interven-

tionist approach.

In many respects ASIC and APRA could learn a

great deal from the well-practiced graduated approach

adopted by the ATO – one in which it initially seeks to

work through issues with particular companies, but

ultimately moves swiftly and punitively when problems

are identifi ed.

The regulators need to focus less on the

machinery of what they do and more on consumer

and investor expectations. Prompt action by the

fi nancial services regulators can help minimise the

taint created by bad apples.

Readers will be pleased to note that Super Review goes digital this month with the release of the Super Review iPad app. We look forward to bringing you this

new service which includes audio, video and a range of

other enhancements to the reader experience. Thanks

to our principal sponsor CommInsure, the App is free

to download from the Appstore.

– Mike Taylor

Our politicans and regulators need to finally accept the failures associated with the Trio Capital saga.

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For 12 years. Before tax. After fees. IFM Alternative Fixed Income Fund

SR



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Bigcustodians

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“We spend between 20 and 25 per cent of our operating expense budget on technology and this, again, supports our operating model going forward.”

– Ian Martin


Ian Martin

Former Perpetual Limited chief executive David Deverall has

been appointed a non-executive director with Charter Hall

Limited and Charter Hall Funds Management.

He is the founder and current managing director of

corporate consulting fi rm Deverall Advisory and previously

served as the managing director and chief executive offi cer

of Perpetual for eight years. At that time he was also the

chairman of the Financial Services Council.

Commenting on the appointment, Charter Hall chairman

Kerry Roxburgh said Deverall’s signifi cant experience in

fi nancial services, funds management and strategy were

essential to his new role.

A promotion for SamwayHyperion Asset Management has announced that Tim

Samway will succeed Dr Emmanuel Pohl as managing

director.

After founding the company 16 years ago, Pohl is stepping

down from his role to set up a new private equity business

at Hyperion, as well as focus on Hyperion Flagship Invest-

ments and individually managed accounts.

Samway is currently Hyperion’s institutional business

director and has been with the company since its inception.

Hyperion stated that in his new role, he would ensure the

continuity of the fi rm’s strategy, investment process and team.

Multiport adds to technical teamIn an effort to boost its consultancy services for trustees,

advisers and accountants, Multiport has appointed Marjon

Muizer as a technical services consultant.

Multiport technical services director Philip LaGreca said

Muizer’s appointment was consistent with the demand for

Multiport’s services amid the growth of the self-managed

superannuation fund sector.

Muizer previously worked at PKF Chartered Accountants

and was also a manager in superannuation for Dixon Advi-

sory and Superannuation Services.

“Marjon’s background working with accountants is essen-

tial in understanding advisers’ and accountants’ needs,”

LaGreca said.

LaGreca added that Marjon’s background working with

accountants would be essential in facilitating the needs of

Multiport’s adviser and accountant base, which has grown

signifi cantly over the past six years.

TAL Limited has announced the appointments of Kent Griffi n and John

Hoyle to its senior executive team.

As a former partner and the head of actuarial and fi nancial services

risk management advisory at Ernst & Young, Griffi n has assumed the role

of TAL chief fi nancial offi cer. He previously spent nine years at AXA, which

included tenure as the regional CFO for AXA Asia.

As well as his new role at TAL, Griffi n is also convener of the risk

management practice committee at the Institute of Actuaries. Griffi n has

considerable expertise in driving change in life insurance companies, said

TAL managing director Jim Minto.

Taking on the TAL Direct chief executive position, Hoyle was most

recently CEO of Chartis Direct, serving for fi ve years. He held senior sales

and marketing roles at AXA Sun Life, IMS Health and Barclays and has

market experience in the UK, China, Taiwan, Hong Kong, India and the

Middle East.

“John’s expertise in running direct insurance businesses and direct

marketing functions will be of huge importance in helping shape TAL’s

direct insurance customer agenda over the coming years,” said Minto. John Hoyle Kent Griffi n

David Deverall

MANDATES


TAL boosts senior team

Deverall goes to Charter Hall board

Received by Type of mandate Issued by Amount

PacWealth Capital Custody NASFUND (PNG) $1.1 billion

NAB Asset Servicing Custodial services JCP Investment Partners n/a

MetLife Insurance Nationwide Superannuation Fund n/a

Sigma Funds Management Custody undisclosed $100 million

AAS Administration Nationwide Superannuation Fund n/a


Vintage Sherry

Pollies want more crackers APRA research?

Well, it’s academic

ROLLOVER wishes Senator Nick Sherry

a fond farewell as the Tasmanian Labor

Senator and former junior minister departs

the Federal Parliament for what will

undoubtedly be a more enjoyable period in

his life.

Sherry had, of course, played a signifi cant

role in the development of superannuation

both as the chair of a key parliamentary

committee, then later as an opposition front-

bencher, and later as Minister for Financial

Services and Superannuation and then as

Assistant Treasurer.

Rollover believes that Sherry’s deep

knowledge of superannuation was never

really refl ected in his ministerial postings.

Certainly, he has a considerably deeper

understanding than the current ministerial

incumbent, Bill Shorten.

It probably says something about Sherry

that his fi nal moments chairing a Senate

Estimates Committee went something like

this:

CHAIR (Senator Sherry): Even before

APRA, ISC. I am doing some work in the

super fi nancial services space, so I am sure

we will bump into each other, hopefully not in

a regulatory disciplinary sense.

APRA deputy chairman, Ross Jones:

Senator, you are about the only person who

has ever made our statistics team’s eyes light

up by saying that you read their publications

in bed at night.

CHAIR: I do. And I keep reading them. I will

continue to do so. Thanks very much. The

committee stands adjourned.

ROLLOVER notes the minor furore

which was created by suggestions that

some politicians, senior public servants

and members of the judiciary would be

side-stepping the Government’s Budget

decision to remove the superannuation

tax concessions applying to those

earning over $300,000 a year.

He particularly noted the status of

those parliamentarians with long years

of service which preceded the changes

to the Parliamentary superannuation

regime introduced by the Howard

Government under pressure from

former Labor Opposition leader Mark

Latham.

However Rollover believes that

in circumstances where the polls

suggest that many long-serving Labor

backbenchers have only an outside

chance of being returned to offi ce, they

need all the tax breaks they can get.

Losing your seat in a predicted

landslide may not hurt so much if you

walk away with a solid super balance.

KNOWING how happy superan-nuation funds are to dig deep and pay their financial services levy to the Australian Prudential Regulation Authority (APRA), Rollover thought the fund chief executives would be delighted to know how at least a part of that money is being spent.

This matter was pursued dur-ing Senate Estimates by Tas-manian Liberal Senator David Bushby, who asked APRA’s deputy chairman Ross Jones about the regulator’s research department, its staff members and its workload.

Mr Jones: We have a research department within APRA. At the moment, it is four staff mem-

bers from APRA. We also have a collaborative arrangement with at least one university. The researchers develop the papers and put those papers out as APRA working papers. They will also put them to conferences and publications and so on. It is like a fairly standard academic process.

Senator BUSHBY: Are they funded in those circumstances? Do you pay for people to do them?

Mr Jones: They are usually our staff. There are four of them.

Senator BUSHBY: Who would actually decide what areas you would conduct that research in?

Mr Jones: It often depends upon the researchers that we are

able to attract and their research interests. Some of them will be PhD students or some of them will be post-PhD, so it is often linked into their areas of particu-lar expertise and interest.

Senator BUSHBY: So it is not driven by the need for informa-tion or data collection from APRA’s perspective in terms of doing its job?

Mr Jones: It is to some extent, certainly. What we would also try to do is align what our research needs might be. But often re-searchers have a very specific ac-ademic interest as well. Often it is linked into their backgrounds in the first place.

Your levy at work.

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Documents

Super Review (June 2012)